GBP/USD: Balance Of Risks Into EU Summit & BoE Meeting This Week – ING

ING FX Strategy Research discusses GBP outlook into this week's EU Summit & the BoE's December policy meeting on Thursday.

"In terms of ratifying the Brexit divorce deal, the EU Leaders Summit (Thu) should pretty much be a formality – or a post-season wrap-up party as one might say. Although we do note that, like with most parties, things may not be as plain-sailing or virtuous as one may have initially planned for – and this could well see the pound retain its 'trashy' status for now.

Despite this Brexit noise, the Bank of England meeting (Thu) is probably now the standout event for GBP markets this week..Coupled with greater clarity over the role of Brexit negotiations in the Bank's policy reaction function, a constructive tone over the recent divorce deal could be seen as a hawkish development," ING argues.

All in all, ING thinks there is a good chance of any hawkish BoE commentary propelling GBP/USD up towards the 1.35-1.36 area this week.

Source: ING Global Markets ResearchOriginal Article